Global markets recover at end of turbulent week
NEW YORK: Global stock markets rose on Friday as investors put economic growth fears and trade jitters to one side, deciding that they had enough drama and losses for one week.
“We’re ending a turbulent week on a more positive note as exhausted traders the world over head into the weekend in a more buoyant mood,” said Craig Erlam, senior market analyst at the Oanda trading group. Equities have had a volatile five days, during which trade talk hopes came and went and economic data and bond yields pointed to a possible worldwide downturn.
On Wall Street, the Dow on Wednesday suffered its worst day of the year, before recovering slightly on Thursday, and bouncing back strongly on Friday. The index gained 1.2 percent, as investors found relief in hope for progress in the trade war, and housing data offered enough good news not to ruin the party, despite a disappointing report on consumer sentiment, but was still down for the week. “In the last couple of days, the sellers have been exhausted,” said Maris Ogg of Tower Bridge Advisors. “The volatility continues. But I don’t think this is the beginning of a trend.”
Investors also were cheered after Der Spiegel reported that the German government was ready to boost public spending to head off any coming recession-something many economists have been urging.
The spooky yield curve
The week’s most nerve-wracking event was a so-called inversion of the yield curve in the US debt market that Erlam said “has spooked a lot of people.” The yield on the 10-year US Treasury bond slid Wednesday below the yield on the two-year note, while the 30-year yield fell below two percent for the first time ever.
The so-called “inversion” phenomenon-when shortterm
interest rates are higher than longer-term ones-is viewed as a reliable harbinger of recession. Economists have warned for months that trade tensions would drag down sentiment, which was already suffering owing to economic slowdown and fears of Brexit’s impact on Britain and Europe.
GE rebounds after accusations
In New York, industrial titan General Electric surged close to 10 percent after CEO Larry Culp bought nearly $2 million in shares, boosting investor confidence after whistleblower Harry Markopolos accused the company of massive accounting fraud-a charge the company vehemently denied.
In Asia, Cathay Pacific on Friday announced the shock resignation of its chief executive Rupert Hogg, days after the Hong Kong carrier was censured by Beijing because
some staff had supported pro-democracy protests in the city. Paul Loo, Cathay’s chief customer and commercial officer, also resigned.
Until recently Cathay had been celebrating a turnaround in fortunes after Hogg initiated a three-year cost cutting program. Elsewhere, the opening of London’s benchmark FTSE 100 shares was delayed nearly two hours by a software problem, the London Stock Exchange said. “London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and (second-tier) FTSE 250 stocks,” said a statement.
The pound meanwhile continued its recovery, “aided by a series of better-than-expected (UK) economic releases in recent days”, helping to offset Brexit uncertainty, according to David Cheetham, chief market analyst at XTB trading group. — AFP